Is it time to buy the buzz?
Needham analysts seem to think so, initiating coverage of Airbnb, DoorDash, Uber, DraftKings and Penn National Gaming with buy ratings on Monday. Among their considerations were “sticky” customer bases and industry leadership.
Though these retail trader favorites are “a bit overpriced,” one in particular may be worth the higher multiple, Chantico Global founder and CEO Gina Sanchez told CNBC’s “Trading Nation” on Tuesday.
“Uber is probably going to be your best bet for price for future growth that’s going to be persistent,” she said.
DoorDash also makes for an interesting long-term opportunity, though it could face obstacles brought on by the economic reopening, said Sanchez, also chief market strategist at Lido Advisors.
“I think there’s actually going to be a decline in the demand for DoorDash in the near term as the recovery happens, and that’s really … the next 12 months,” she said. “So, I think it’s really expensive for what you’re going to get, but it’s probably not a bad play longer term.”
Uber’s technicals check out, too, Mark Newton, founder and president of Newton Advisors, said in the same “Trading Nation” interview.
Down 10% from its February highs, the stock has now “formed a nice triangle pattern,” Newton said, citing Uber’s chart.
“It shows much better relative strength than many of the others that have fallen between 15 and 30% off those levels, so, I would position long here on Uber,” he said. “I like buying at current levels and would actually add to longs on a breakout of this triangle at 61. That would cause it to likely accelerate up to Needham’s target in the mid-70s, so, that would be my pick.”
Uber shares ended trading down nearly 1% at $57.16 on Tuesday.
Newton said DoorDash is also “one of the more actionable stocks” of the group in the short run. It was trading around $162 in Wednesday’s premarket.
“It has formed a nice … rounding bottom, and we’ve just exceeded April highs and started to accelerate,” he said.
“We could see it get to 170 sometime in the month of May, in my view, but I just feel that the weekly momentum is a little bit of a concern. I always want to steer clear from stocks that are starting to show weekly momentum … roll over that have declined 20-30% off the highs.”